South Africa Signs Deal For First LNG Import Terminal At Richards Bay

South Africa is all set to develop its first liquefied natural gas (LNG) import terminal at the Port of Richards Bay. Zululand Energy Terminal, a joint venture between Vopak Terminal Durban and Transnet Pipelines (TPL), has officially signed a 25-year Terminal Operator Agreement (TOA) with Transnet National Ports Authority (TNPA).

The agreement, signed on February 10, 2025, gives Zululand Energy Terminal the rights to construct, develop, finance, operate, and maintain the LNG import terminal in Richards Bay.

This follows the Request for Proposal (RFP) award in January 2024 and marks the completion of detailed discussions between TNPA, the port authority, and Zululand Energy Terminal, the terminal operator.

The LNG terminal will be developed in two phases:

Phase 1 will involve setting up a Floating Storage Unit (FSU) with a capacity of 135,000–174,000 cubic meters and onshore regasification facilities that can handle approximately 400 million standard cubic feet per day (mmscfd).

A new pipeline connection will link the terminal to the Lilly Pipeline via Empangeni, providing an additional tie-in point for customers in the Richards Bay Industrial Development Zone (IDZ). The plan also includes optional truck-loading facilities for wider distribution.

Phase 2 will replace the FSU with a permanent onshore storage tank of up to 220,000 cubic meters. This expansion will increase the gas send-out capacity to 600 mmscfd, supporting Gas-to-Power projects in Richards Bay and supplying industries nationwide.

As South Africa faces declining gas supplies and prepares to shut down aging coal-fired power plants, the terminal will play a vital role in ensuring energy security, supporting industrial development, and expanding gas supply options for power generation and industries.

Zululand Energy Terminal is already in discussions with potential customers as part of its capacity allocation process. A final investment decision (FID) is expected in 2026, which will depend on securing long-term commitments from buyers.

A Vopak South Africa representative said that the project aligns with Vopak’s strategy of expanding in industrial and gas terminals and providing sustainable energy solutions for the country.

Alongside the LNG project, TNPA has also signed a 25-year concession agreement with FFS Tank Terminals for a liquid bulk terminal at Richards Bay’s South Dunes precinct.

The liquid bulk terminal will cater to the growing demand for bunker fuels, further enhancing maritime fuel services in the region.

A Transnet official said that these projects are critical for modernising South Africa’s port infrastructure and will help the country remain competitive in the global energy and shipping markets.

Zululand Energy Terminal’s Request for Proposal (RFP) process, which began on September 23, 2024, has already identified key stakeholders interested in the terminal’s services.

Negotiations are ongoing with a select group of customers to finalise agreements necessary for the 2026 investment decision.

Reference: Vopak

Source: Maritime Shipping News